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Five Things You Need to Know to Start Your Day

Five Things You Need to Know to Start Your Day

(Bloomberg) --

Problems stack up in Europe, White House leveraging Huawei, and more bad news for oil. Here are some of the things people in markets are talking about today.

Italy on brink, U.K. shrinks

Italian Deputy Prime Minister Matteo Salvini said that the government no longer held a majority in parliament, and called for “swift” elections, a move which is hitting the country’s sovereign bonds today. Prime Minister Giuseppe Conte said he would not let Salvini dictate the pace of events as he tried to hold onto power. Meanwhile, the new U.K. Prime Minister got some disappointing economic news with figures showing the first fall in GDP since 2012 in the second quarter. A modest recovery is forecast for the third, in data to be published in the aftermath of the Oct. 31 Brexit deadline. So it is possible people may be too distracted by the fallout to pay much attention. 

Huawei on hold

The White House is delaying a decision on licenses that would allow U.S. companies to restart business with Huawei Technologies Co. after China said it was halting further purchases of U.S. farm goods, according to people familiar with the matter. Huawei – which continues to try to reduce its reliance on American companies – unveiled  HarmonyOS today, designed to potentially replace Google’s Android as the operating system in the company’s handsets. 

Another warning

The International Energy Agency this morning described the outlook for crude as “fragile” and trimmed its demand-growth forecasts for this year and next. It warned that it may cut those estimates further should the U.S.-China trade war drag on, with data showing global oil consumption increased at the slowest pace since 2008 in the first five months of this year. A barrel of West Texas Intermediate for September delivery was slightly higher at $52.78, while still being down more than 5% for the week

Markets mixed

Overnight, the MSCI Asia Pacific Index gained 0.3% while Japan’s Topix index closed 0.4% higher as the region’s stocks reacted to the rally in the U.S. yesterday. In Europe, the Stoxx 600 Index was 0.5% lower at 5:45 a.m. Eastern Time with Italy’s FTSE MIB Index dropping more than 2% as investors seek safety from the political mess there. S&P 500 futures pointed to a loss at the open, the 10-year Treasury yield was at 1.698% and gold was back over $1,500. 

Coming up…

U.S. PPI data for July is published at 8:30 a.m. North of the border, Canadian payrolls number is expected to show an increase of 15,000 for the month following June’s small drop. In earnings today, PG&E Corp.’s results will reveal the impact of its bankruptcy on the day-to-day operations of the utility company. The latest Baker Hughes rig count is at 1:00 p.m.

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To contact the editor responsible for this story: Sid Verma at sverma100@bloomberg.net, Samuel Potter

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